What's going on with Oracle (ORCL 1.70%) this year? The stock has struggled through the first few months of 2026 and is down more than 18% after skyrocketing in the third quarter of 2025. The worst may be over now, according to JPMorgan's latest analysis.
NYSE: ORCL
Key Data Points
A record quarter lifts the mood
Oracle just delivered a record quarter, with earnings per share and total revenue both up by more than 20% year over year. Management said this was the first time in over 15 years that Oracle experienced 20% growth in both metrics in the same period.
JPMorgan quickly upgraded Oracle to Overweight from Neutral following the earnings report. The recent sell-off improved the company's risk-reward profile, according to JPMorgan analyst Mark Murphy. The bank set a $210 price target for Oracle. Barclays also increased its price target for Oracle to $240 following the earnings release. The stock closed still well below targets at $159 on March 12.
Analysts are bullish on Oracle because many believe the recent sell-off was overblown and that the company now offers a more attractive entry point and fairer valuation. Oracle also successfully secured $25 billion in debt, which eases concerns about its debt rating and the need to raise incremental funds throughout 2026.
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There were many concerns about Oracle at the start of the year, which contributed to its stock's decline. From over-concentration in OpenAI to fears about the high cost of AI-related capital expenditures, and more debt financing to meet build-out demand, the extraordinarily high valuation no longer seemed justified.
Since September 2025, Oracle has declined by more than 50% from its 52-week high of $345.
The massive build-out continues
The short-term headwinds don't negate the fact that Oracle's Remaining Performance Obligations (RPOs) reached $553 billion in the third-quarter 2026 report, a 325% increase compared to the year prior. RPOs represent non-cancelable future revenue, including invoiced and backlogged contracts. Growing RPOs are a strong signal of continued momentum.
There's no doubt that Oracle's most recent quarter has shifted the narrative among investors and analysts. The company also recently announced it will layoff 12% to 18% of its workforce, between 20,000 and 30,000 jobs, in an effort to improve its cash position.
For long-term investors who can tolerate Oracle's high debt load and its need to spend exorbitant amounts building out AI data centers, the stock is far more attractively priced now than it was through much of 2025.
Oracle's huge backlog is promising, and the company is cutting expenses while investing in its future. Oracle should continue to deliver significant growth for investors for quite some time. Hitting JPMorgan's raised price target of $210 doesn't seem so far off now.
